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Impact of COVID-19 on project performance in the UAE construction industry

Article  in  Journal of Engineering Design and Technology · June 2021

DOI: 10.1108/JEDT-12-2020-0481

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Impact of
Impact of COVID-19 on project COVID-19 on
performance in the UAE project
performance
construction industry
Muhammad Sami Ur Rehman, Muhammad Tariq Shafiq and
Muneeb Afzal
Received 1 December 2020
Department of Architectural Engineering, United Arab Emirates University, Revised 31 January 2021
Al Ain, United Arab Emirates 20 March 2021
Accepted 20 April 2021

Abstract
Purpose – The coronavirus disease 2019 (COVID-19) pandemic has affected the global economy and, thus,
the global construction industry. This paper aims to study the impact of COVID-19 on construction project
performance in the United Arab Emirates (UAE).
Design/methodology/approach – This study adopted a qualitative and exploratory approach to
investigate the impact of COVID-19 and its policies on project performance in the UAE construction industry
in critical areas of the project management body of knowledge (e.g. schedule, cost, resources and contracts).
Semi-structured interview questions were asked from ten construction professional to obtain valuable
insights into the pandemic’s effects on the UAE construction industry and the effectiveness of policies
implemented to rectify the damage and identify the industry’s new normal.
Findings – The findings indicate that the construction industry faced several challenges such as schedule
delays, disrupted cashflows, delayed permits, approvals and inspections, travel restrictions, serious health
and safety concerns, material and equipment shortages, among others which hindered the timely delivery of
construction projects. It also indicates that efforts made by the government institutions and the construction
industry of the UAE such as economic support programs, digitization of processes, fee and fine waivers,
health facilities, among other statutory relaxations proved effective in supporting the construction industry
against the adverse effects of the pandemic.
Research limitations/implications – The research findings are limited to the literature review and ten
semi-structured interviews seeking an expert’s opinion from industry professionals working in the UAE
construction industry. The research team did not get access to project documents, contracts and project progress
reports which may be required to validate the interview findings, and to perform an in-depth analysis quantifying
the impact of COVID 19 on construction projects performance, which is a limitation of this research.
Practical implications – The implication is that, owing to the imposed lockdowns and strict precautionary
measures to curb the rapid spread of the pandemic, smooth execution of the construction project across the country
was affected. The government institutions and stakeholders of the construction projects introduced and
implemented various techniques and solutions which effectively handled the implications of the COVID-19
pandemic on the construction industry of the UAE.
Originality/value – This study has identified the challenges faced by the construction industry of the UAE in
the context of the management of project schedule, project cost, construction contracts, health and safety of
construction employees and other related aspects of the construction projects. This study also identified the
techniques and solutions adopted by various public and private institutions of the country and their implications on
construction projects. Therefore, this study provides guidelines for policymakers and future research studies alike.
Keywords Construction project management, Built environment research,
Construction management
Paper type Research paper
Journal of Engineering, Design
and Technology
The authors gratefully acknowledge the funding provided by the United Arab Emirates University © Emerald Publishing Limited
1726-0531
(UPAR - G00003311). DOI 10.1108/JEDT-12-2020-0481
JEDT Introduction
The infrastructure sector is an integral part of every country’s economy (Weber and Alfen,
2016) because it contributes to the economy and citizens’ overall well-being. Approximately
US$10tn is spent globally on construction-related goods and services every year (McKinsey
Global Institute, 2020). As per Statista (2020), construction expenditures are projected to
reach US$14tn in 2025. Construction contributes to a country’s overall gross domestic
product (GDP) and engages a large number of people at different hierarchical levels, who
contribute in their respective capacities to execute projects.
Coronavirus disease 2019 (COVID-19), declared a global pandemic by the World Health
Organization (WHO), has caused economies in the Middle East to suffer significantly
because of the measures implemented to control its spread. Statistics provided by the
International Air Transport Association (IATA, 2020) show that 1.7 million jobs in the
Middle East will be lost as a result of border closures reinforced because of COVID-19. Every
economy is introducing practices such as social distancing and has aggressively embraced
work-from-home or remote working practices instead of working in offices (Baveja et al.,
2020). World leaders are collaborating to introduce and implement measures that garner
positive results and ensure a safe environment and the well-being of their citizens to enable
economies to gradually revive (Yam et al., 2020). Similarly, the United Arab Emirates (UAE)
has taken precautionary measures to reinforce the safety of its residents and measures that
directly affect the performance of ongoing construction projects (Ghandour, 2020).
Legislations and precautionary measures introduced by authorities have impacted the
smooth execution of construction projects (Khalfan and Ismail, 2021). Although some
preliminary studies are available which discussed the context of COVID-19 and
construction, very few discussed the in-depth implications of the pandemic on construction,
are region-specific and do not give insight into the condition of the UAE construction
industry (Alsharef et al., 2021; Jallow, 2020). This study addresses the impacts of the
pandemic on construction project performance in the UAE and evaluates how well the
country’s construction industry has endured the ongoing pandemic. The specific aims of
this research study are as follows:

to assess the impact of the disruptions caused by the COVID-19 pandemic on the
overall performance of construction projects in the UAE;

to identify the measures announced by local authorities, whether precautionary,
preventive or economic support and their respective impact on the UAE
construction industry; and

to present the corrective measures, methods and techniques adopted by the
construction industry to address the pandemic situation and their effectiveness.

Literature review
Significance of the United Arab Emirates construction industry
The UAE construction industry is considered among the most established industries in the
world. It attained this stature gradually. In the 1960s, oil was first discovered in the UAE, kick-
starting the construction industry toward fulfilling the region’s infrastructural needs. The UAE
eventually transformed itself into a dynamic country based on zealous tourism and business
activities that became its push factor in involving itself in grandiose construction projects and
attracting international construction stakeholders to participate in them (El-Sayegh et al., 2020).
The construction sector plays an important role in the UAE’s economy (Johnson and Babu,
2018; Zahmak et al., 2020; Enshassi et al., 2016; Abdullahi et al., 2018; Muhammad, 2017), which
is why it attracts investments and strong government support. The pragmatic policies adopted Impact of
by the UAE government include allocating oil revenue to the developing non-oil economy to COVID-19 on
attract foreign investments and financing infrastructure, development and housing projects
(Al-Malkawi and Pillai, 2013).
project
As per El-Sayegh et al. (2020), the UAE construction industry has consistently grown performance
and is expected to further achieve greater milestones in infrastructure construction. The
gradual increase in the UAE’s GDP over the years indicates the importance given to local
construction. The contribution of construction to the GDP is projected to increase from
10.3% in 2011 to 11.5% in 2021 (Dubai Chamber of Commerce Study, 2012). As per Zahmak
et al. (2020) and Al-Ameri et al. (2020), investments of approximately AED3tn were made in
construction in 2017, which accounted for 33% of the total value of all construction projects
that materialized in Gulf Corporation Council (GCC) countries. The construction industry is
transforming the UAE into a digitally advanced region, as pledged in its 2025 Vision (Al-
Ameri et al., 2020). The industry involves approximately 2 million people representing
approximately 7.2% of the total workforce, thus establishing a stable economy (Daleure,
2017).
Generally, UAE construction projects are challenged with strict deadlines and capital
expenditure caps because of private sector developers’ commercial and marketing policies.
As per Shafiq and Afzal (2020), different infrastructure projects costing more than US$55bn
are underway in the UAE, including the construction of metro lines, Expo 2020 and airport
extensions, among others. Dubai, one of the UAE’s emirates, is famous for having the
highest per square kilometer of construction activity globally (Faridi and El-Sayegh, 2006).
Similarly, the world’s first-of-a-kind infrastructure projects were constructed in the UAE,
including the Burj Khalifa, the world’s tallest building, which was completed in 2010 (BBC,
2010). Although this industry plays an important role in the UAE’s economy, it faces serious
issues that impede its progress, such as lack of project financing, less time and cost overruns
(Zahmak et al., 2020). These challenges affect not only the construction industry but also the
country’s overall economy. For example, the global financial crisis, which halted the world’s
economies in 2007, slowed down the architecture, engineering and construction (AEC)
industries but, overall, did not impede the UAE’s commitment to development and
infrastructure (Mehran, 2016). The 2011 Al-Masah Capital Limited report noted that the
UAE construction industry contributed 60% of the property boom in the GCC, with Dubai
contributing 47% of the GCC total (Mehran, 2016). The UAE’s infrastructure industry is
expected to tackle the current economic barriers with the same ability, considering this trend
and the current global economic situation resulting from the pandemic.

COVID-19 and its implications on construction industry

Construction projects have become more difficult and complex owing to the presence of
many critical success factors (Chan et al., 2004). The advent of the COVID-19 pandemic has
affected the performance of several success factors including planning, execution,
communication, economic, social, political and technological factors (Denny-smith et al.,
2021; Khalfan and Ismail, 2021; Stiles et al., 2021). Most critical among all factors is the
health and safety of the front-line construction workers. Stiles et al. (2021) investigated the
guidelines provided by various national and international health authorities and their
implementation and effectiveness in the construction industry. Wang (2021) explored the
urban and architectural design perspective of urban developments and their potential to
reduce the spread and impact of such pandemics in the future. Casady and Baxter (2020)
researched the existing framework of public-private partnerships (PPP) and emphasized the
need for reevaluating the Force Majeure clause from a PPP perspective. Moreover,
JEDT Khalfan and Ismail (2021) stated the Kingdom of Bahrain’s COVID-19 action plan, its
implications on the construction sector. However, these studies lack in-depth analysis and
insight into the implications of COVID-19 on the construction industry.
The successful execution of construction projects still hinders by the implications of
COVID-19. Several studies are being undertaken to understand the impact of the pandemic
on execution aspects of the construction projects world over. Jallow (2020) conducted a study
to gauge the impact of COVID-19 on the infrastructure sector of the UK and found that this
pandemic forced most of the staff and workers to stay at their homes and work remotely,
hence, making the project management extremely difficult which lead to delays. Alsharef
et al. (2021) identified the adverse effects of COVID-19 pandemic on the USA’s construction
industry and identified material delivery and permitting delays, material and workforce
shortages, lower worker and equipment productivity, cash flow disruptions and financial
losses and potential conflicts and disputes. Similarly, Amoah and Simpeh (2020) researched
the implementation challenges of health and safety measures to curb the adverse effects of
COVID-19 and identified the hardships faced by South Africa’s construction industry. It is
clear from the studies that the construction industry around the globe faced adverse effects
owing to COVID-19 pandemic, which prevented the successful execution of construction
projects.
The COVID-19 pandemic also hit the UAE hard and resulted in the closure of all
construction-related activities, including the much-awaited Expo 2020 in Dubai (Baycar,
2020). Similarly, the construction sector was affected by the “lockdowns,” which were
implemented to “flatten the curve” (Caulkins et al., 2020). Because the construction industry
is the backbone of the UAE’s economy, measuring the effects of this pandemic on the overall
performance of construction projects is of utmost importance (Mashreq, 2020). Ghandour
(2020) aimed at establishing the implications of COVID-19 on project delivery from the
perspective of the construction industry of the UAE. Results suggested that there is a
significant increase in the required days to complete the project owing to the inaccessibility
to raw material and labor. However, studies investigating the impact of COVID-19 on the
performance of various project aspects (such as schedule and contract performance) and
identifying measures taken to address the prevailing situation, especially within the context
of the UAE, are lacking.
This study is the starting point of the exploration of the impact of COVID-19 on the UAE
construction industry and investigates the degree to which construction projects are affected
in terms of their schedules, costs, resources and contracts. This research also lays out the
current conditions in the UAE construction industry and how well it has managed situations
during the pandemic. Further, this study highlights the recommendations provided by
industry experts who suggested using the pandemic as an opportunity to make construction
stakeholders and policymakers realize the importance of adopting digital mechanisms in
business continuity.

Research methodology
This study is exploratory in nature and uses semi-structured interviews. A semi-structured
interview is a data collection method that is well suited for exploring participants’ opinions
regarding complex information and probing further explanations to answers (Barriball and
While, 1994). This qualitative inquiry approach is best suited for this research for the
following reasons:

to quickly identify the challenges faced by construction professionals during the
COVID-19 pandemic through first-hand interactions;

to allow experts to speak in greater detail on issues that the researcher raises and to Impact of
introduce new issues related to the subject matter; COVID-19 on

to present business continuity strategies that address the challenges presented by project
the COVID-19 situation; and performance

to allow the researcher to change the questions if participants raise issues to which
the questions do not cater.

The semi-structured interviews were conducted following the guidelines laid out by
Rabionet (2011). Different aspects of construction projects were considered during
these interviews to evaluate the impact of the pandemic on key aspects and situation-
specific factors. The research objectives were translated into the following six major
categories:
(1) project schedule;
(2) project cost;
(3) project resources;
(4) contracts
(5) working with COVID-19-specific standard operating procedures (SOPs); and
(6) normalization, pandemic-proof policies and future directions.

Consequently, this research was underpinned by the following categories:

Category 1 Questions – Project Schedule. To understand the impact of COVID-19 on
the schedule performance of ongoing and planned projects;

Category 2 Questions – Project Cost. To understand how the pandemic disrupted
the financial planning for ongoing and planned projects;

Category 3 Questions – Project Resources. To understand how stringent lockdowns,
restricted travel and other key measures imposed to curtail the spread affected the
availability of vital resources for ongoing projects;

Category 4 Questions – Contracts. To understand the efficiency and performance of
current contracts in handling the COVID-19 pandemic;

Category 5 Questions – Working with SOPs. To understand project performance
under the implementation of novel SOPs announced by the authorities; and

Category 6 Questions – Normalization, pandemic-proof policies, and future
directions. To estimate the normalization of the current situation and how the
construction industry plans to address similar future situations.

Sampling size and nature of semi-structured interviews

Sampling assists with representing a large population by obtaining responsible responses
that are otherwise difficult to obtain because of different restrictions (Saunders et al., 2019).
A purposive sampling technique is used in this study (Teddlie and Tashakkori, 2010) for the
following reasons:

willingness to participate;

ease in accessibility; and

experience in the construction industry.
JEDT A similar technique was used by Jallow (2020) to evaluate the effect of the COVID-19
outbreak on the construction industry in the UK, by conducting five semi-structured
interviews.
Different industry professionals holding key positions and with years of
experience in their respective fields were interviewed. Participants were selected
based on their backgrounds and years of experience. The most suitable participants
were shortlisted after a careful evaluation of their profiles and the type of data
required to achieve the objectives of this study. The interviews were designed to
obtain feedback on each phase of the construction, and the study sample included
members from senior management, design teams, coordination teams, planning
and control teams and on-site execution staff. More semi-structured questions were
asked to obtain an in-depth response from each participant, depending on his or her
background. For example, a participant with a background in contracts was expected
to provide a more thorough answer about contracts; thus, various semi-structured
questions were asked to gather more detailed knowledge of the effects of the
COVID-19 pandemic on current contractual bindings and how the company managed
the situation. These categories were structured in a sequence, allowing participants to
always correlate to the previous category and more accurately summarize and
articulate their rationale in a coherent manner. Table 1 displays information on
participants’ backgrounds, expertise and traits of the company with which they are
associated.
Shortlisted participants were contacted, and interview dates were scheduled using the
Doodle app. To avoid face-to-face interactions and adhere to the social distancing measures
introduced by the authorities in the UAE, interviews were conducted using the online
meeting platforms Zoom and Microsoft Teams. Initially, a transcript was read that asked for
the participants’ consent to anonymously use their feedback for this research. The
interviews were recorded, and their durations were approximately 30 min. Written
transcripts of the discussions were generated from the recorded sessions. To analyze the
results of this study thematic analysis was conducted and themes were categorized based on
a deductive approach based on existing knowledge and prevailing pandemic conditions,
which resulted in the Findings and Discussion section.

Participant Years of Size of

Sr. no. Current position code experience Type of organization organization

1 Director of P1 22 Client 1,200þ

Quality and a
PMO Member
2 Director of P2 21 Contractor 5,000þ
Construction Management
3 Senior Design Engineer P3 16 Design Agency 1,000þ
4 BIM Manager P4 15 Government Agency 1,000þ
and Chief
Specialist
5 Senior Design Engineer P5 15 Consultant 2,000þ
6 Senior Contracts Engineer P6 12 Contractor 1,000þ
7 Assistant BIM Manager P7 10 Client 250þ
Table 1 8 Project Engineer P8 8 Contractor 1,500þ
Demographic profile 9 Site Engineer P9 7 Contractor 5,000þ
of participants 10 Planning Engineer P10 6 Contractor 1,200þ
Interview specifics Impact of
Each category is briefly discussed as follows and provided in Figure 1. COVID-19 on
Project schedule. This category comprised three questions on the impacts of COVID-19-
related policies on construction schedules. The questions also attempted to collect
project
information on how the construction industry responded to these impacts and to what performance
extent ongoing construction projects were delayed. These questions also attempted to
identify the measures and strategies adopted to minimize the effect of these impacts.
Furthermore, planning strategies for future projects or early execution phases were
investigated.
Project cost. This category also comprised three questions aimed at ascertaining the true
extent to which project cash flows were affected by the pandemic and related policies. This
category aimed to determine the disruption in clients’ progress payments to contractors,
sub-contractors, material suppliers and vendors. Almost every business around the globe
opted for cost-cutting or cost optimization during the pandemic. This study also attempted
to investigate the impact on employee salaries. Also discussed were the policies of banks
and other lending agencies and how they affected the UAE construction industry.
Project resources. This category focused on the availability of key resources, such as
manpower, materials and equipment, during the pandemic and its effect on project
performance. It also focused on alternate solutions adopted to keep projects on track and
how different stakeholders worked out strategies to manage this unique situation. Finally,
this category addressed how projects were being managed during the pandemic without the
required resources.
Contracts. The most important aspect of managing the pandemic was the “contract.”
This category investigated how current contract clauses were handled during the pandemic
and gauged the effectiveness of current contracts with respect to the pandemic. This
category attempted to identify the changes made to existing contracts related to project
deadlines, extensions, cost compensations, specification modifications and liquidated
damages. Furthermore, it investigated the “force majeure” clause in contracts and its
effectiveness in addressing issues that arose because of the COVID-19 pandemic. Finally,

Figure 1
Selected categories
for investigating
COVID-19 impacts
JEDT this category inquired about contractual modifications suggested by international contract
institutes, such as the International Federation of Consulting Engineers (FIDIC), or changes
in local laws by the UAE government.
Working with standard operating procedures. This category of questions examined the
effects of precautionary measures and novel SOPs introduced by the authorities to curb the
spread of COVID-19. It also focused on identifying how working with SOPs was different
and their influence on project performance. This category also attempted to identify the set
of SOPs announced for the UAE construction industry and whether the construction
industry required new safety training and equipment to ensure the effective implementation
of the SOPs. It also investigated how social distancing was ensured and the extent to which
construction workers followed precautionary measures. Finally, this section inquired about
the procedures for addressing individuals with COVID-19 symptoms and ensuring the well-
being of all workers on a site.
Normalization, future directions and pandemic-proof policies. This category inquired
about the construction industry’s expectations of the potential normalization of the current
situation and its view about the new normal for future construction projects. It also
investigated the industry’s preparedness for planned construction projects and the most
anticipated second wave of the COVID-19 pandemic. Finally, this category investigated how
the lesson learned from this pandemic could be used to better prepare for such situations in
the future.

Findings and discussion

Project schedule
Summary of results. All respondents agreed that the COVID-19 pandemic and the policies
announced by the authorities to curb its spread affected the overall performance of
construction project schedules. Initially, the rapid spread of the virus halted operations at all
construction sites across the country. Soon after, the authorities permitted the construction
industry to remain operational, and workers were allowed to travel to and from the worksite
after obtaining special permits. This disruption delayed projects and completion dates were
renegotiated to accommodate the impacts of the pandemic. Since that time, various
techniques were adopted to put the projects back on track by using all available resources.
As a result, the relaxation announced by the authorities for the construction industry and
the positive attitude of all stakeholders toward resolving the current situation helped the
overall industry toward normalization.

Q1. How do COVID-19 and its related policies impact the performance of the project
schedule?
All participants indicated that the efficient performance of the construction project schedule
depends on many factors, such as the workforce, materials, equipment availability and a
suitable work environment. As COVID-19 began spreading in the UAE, the concerned
authorities implemented a strict lockdown to stop the spread of the deadly virus, resulting in
international border closures, air travel bans, inter-emirate travel bans and industry
shutdowns. These conditions forced an operational disruption across the construction
supply chain. Most of the materials used in construction projects in the UAE are imported
from other countries. However, the pandemic disrupted economies all around the globe,
which adversely affected the execution of the projects. Similarly, local suppliers and vendors
suffered the same fate, as their operations were also affected by positive COVID-19 cases in
their organizations. This supply chain disruption affected the overall performance of the Impact of
projects, thereby delaying most construction projects across the UAE (Ghandour, 2020). COVID-19 on
Q2. Did you develop a new schedule baseline and were solutions adopted to achieve the project
targets? performance
Contractors were the first to formally notify clients, consultants and other stakeholders
about the prevailing situation and possible delays. At the time the pandemic started, the
current stage of the project was a major factor when implementing a revised schedule’s
baseline and agreeing on a new completion date. Participants identified three strategies to
address the new completion dates. First, projects in the initial execution stage were inclined
to submit a revised schedule baseline by transferring the impact of COVID-19 to the end of
the project’s lifecycle. Second, partially completed and nearly completed projects applied for
an extension of time (EoT) to accommodate the delays caused by the pandemic, without
modifying the existing schedule’s baseline. Participant P6 stated that, earlier, their project
was supposed to be completed by March 2021. After submitting the EoT and obtaining
approval, their revised completion date moved forward to October 2021. Finally, completed
projects were given the flexibility or an extension to conduct the necessary testing,
commissioning and handing over to the end-user.
Participants identified and discussed four major categories to reduce the pandemic’s
impact and complete projects: manpower, material, equipment and finances, as
identified by Alsharef et al. (2021). First, as soon as the pandemic hit, authorities in the
UAE encouraged a “work from home” policy, and all organizations across the country
followed it to minimize the spread of the virus among their employees. Participant P4
stated,
All our meetings and interactions were shifted to online platforms and we were using Microsoft
Teams. Our Information Technology (IT) department did a great job and enabled us to perform
our duties from the comfort of our homes during these difficult times.
Some organizations followed a 15-day rotation period by dividing their teams in half and
asking half the team to go to the office for 15 days and then switch with the other half. Some
organizations asked their office staff to go to the office for a short period, attend short
meetings, collect their tasks and return home to work remotely for the rest of the time.
Similarly, on-site labor accommodations, special travel arrangements and limited work-site
attendance with multiple shifts allowed continuous execution of works during this
pandemic, as identified by participant P5. Second, to address the shortage of materials
imported from abroad, all stakeholders discussed using alternate materials that were readily
available in the country, most of which were approved by allowing design changes. Rates
were modified accordingly. Participant P1 stated,
Earlier, we wanted better Granite finishes, which were being imported from Italy and took usually
3 months to be delivered. Now, to reduce the delays, we are agreeing to modify the design and
adapt to readily available solutions, like marble or ceramic finishes.
Third, participants noted that most of the machinery and equipment used in the UAE
construction industry came from China and Europe. Contracting firms were officially
notified of this problem. After a series of meetings with consultants, on a case-by-case basis,
already available equipment was allowed to be used. Finally, all participants mentioned that
additional funds were assigned specifically to address the pandemic situation and steer
projects away from the adverse impacts of COVID-19. All these discussed measures were
implemented with variations, and they helped reduce anticipated delays.
JEDT Q3. How did COVID-19 affect the planning of future projects?
As per industry reports and internal studies, the UAE construction industry predicted
another wave of the COVID-19 pandemic. Participant P1 stated,

When the industry mentioned the second wave, the analytics were not talking about another
spread of the virus; rather, they were referring towards the cash flow and contractual shocks that
could result from this pandemic.

The organizations considered various factors while planning their future projects. For
example, the earlier assumed time duration for slab-to-slab activity was 21 days; currently,
most developers consider more realistic durations, such as 30–45 days, to accommodate
adverse impacts and avoid legal consequences. The participants emphasized the fact that all
lessons learned from this pandemic should be considered when planning future projects,
including regarding human resource reserves, alternate materials and equipment
arrangements, flexible construction schedules and financial margins to absorb the impacts
of similar situations. All these factors should be investigated during the planning phase and
must be included in the risk identification and assessment process to ensure that the
respective mitigation plans have the provisions and capacity to address such events in the
future (Casady and Baxter, 2020).

Project cost
Summary of results. The economic decline owing to the COVID-19 pandemic adversely
affected the supply chain and posed serious cash flow implications that cannot be
underestimated. Banks and other lending agencies stopped payments to carry out various
risk assessments and implement risk mitigation strategies; thus, owners delayed payments
to main contractors, which had a drastic domino effect on associated businesses. Everyone
understood the scale of the pandemic and accepted the reality. Instead of harsh notices and
legal actions, all parties showed flexibility and adapted to the situation to a reasonable
extent. All the participants indicated that the cash flow impacts were significant but
manageable.

Q4. How has COVID-19 impacted worker’s salaries and project cash flows and
associated payments from clients to main contractors, sub-contractors, vendors and
suppliers?
This question garnered three different responses categorized as follows:
(1) timely payments;
(2) partial timely payments; and
(3) delayed payments.

Participants identified that government agencies handled the pandemic well, as most
government projects had approved budgets for the fiscal year 2020. Given the availability of
the budgets, all payments were made on a timely basis to all contractors, subcontractors,
suppliers, vendors and employees alike. Payments from government agencies were also
delayed, not because of a lack of funds but because of the disruption caused to normal
operations when everyone stopped going to work and finance teams faced difficulties in
getting the approved invoices from consultants and contractors, preparing payments and
obtaining the required signatures within the stipulated time. In other development and
infrastructure projects, payments were delayed from main contractors to sub-contractors, Impact of
vendors and suppliers, because most such payments were linked to pre-set milestones and COVID-19 on
deliveries of various items that were not realized because of the restrictions imposed for the
pandemic. For imports, payments were linked to letters of credit (LCs), and LC conditions
project
were not being met because of COVID-19 disruptions; thus, payments were stopped. In this performance
scenario, most firms paid full salaries to their employees (Khalfan and Ismail, 2021). Finally,
all the participants indicated that real-estate developments were adversely affected, because
most end-users stopped receiving payments from banks and lending agencies and even their
salaries. Thus, payments were stopped from developers to main contractors, which
disrupted the overall supply chain and resulted in downsizing and salary cuts. All
stakeholders understood the situation and negotiated various strategies to curb the impacts
of the pandemic and address the delayed payments.

Q5. What volume of cost overruns are expected, and who will bear these losses?
The estimation of cost overruns required detailed analysis and assessment of the situation
by identifying the key factors and their respective effects on every activity present in the
work breakdown structure. All participants indicated that clients were notified about
potential risks and associated delays; additionally, they were told that detailed risk
quantification would be subsequently submitted. Different strategies were proposed and
implemented by stakeholders to address the cost overruns and reduce their impact on the
overall cost of the project. Participant P6 mentioned that they implemented an innovative
method in the organization and asked their sub-contractors, vendors and suppliers if they
wanted quick payments without achieving pre-set milestones; if so, they should announce
discounts. In that way, the associated stakeholders received the required payments to
effectively conduct their operations and survive the pandemic, and the main contractor
saved funds to cover the additional costs incurred to curb the impacts of COVID-19. Some
suppliers and vendors agreed to the offer, but others rejected it. Participant P6 stated that
their organization successfully convinced the clients and modified their contract type from
lump-sum to cost plus a fixed fee. Additionally, all the participants identified factors that
could accommodate cost overruns. For example, given the downsizing, labor availability
increased and, as a result, the cost of labor dropped, which to some extent addressed labor
shortages during critical times. Additionally, given the uncertainty, many organizations
increased their risk appetite and reduced their profit margins to secure jobs and strengthen
their positions during the pandemic. All of these identified strategies and methods
significantly reduced the impact of COVID-19 on project cost overruns.

Q6. How did banks and other lending agencies modify their policies?
All of the participants highlighted the fact that as the pandemic hit the UAE, banks and
other lending agencies halted payment issuances. In the early months of the pandemic,
banks reevaluated their risk management strategies and implemented more regulations for
funding construction projects. “At the time, it was difficult to even secure performance
guarantees from the banks,” participant P6 stated. To ease financial troubles and support
economic activities throughout the country, the Central Bank of the UAE (CBUAE)
announced the Targeted Economic Support Scheme (TESS), which encouraged almost all
banks to come forward and join the relief efforts (CBUAE, 2020). TESS pumped in
approximately AED100bn, which was subsequently increased to AED256bn, to support
private sector companies and other private customers. Multiple relief measures were
introduced to support the UAE construction industry, such as a liquidity relief fund of
JEDT AED50bn through local banks to support eligible customers. These customers were not
required to pay the banks any principal amounts or make interest payments for the agreed
deferment period. The account opening duration was set to two days, and minimum
payment requirements were scrapped temporarily. This supported the UAE construction
industry and helped it revive its former glory.

Project resources
Summary of results. The COVID-19 pandemic affected all aspects of construction projects
and disrupted resource availability and management the most severely (Jallow, 2020). The
UAE construction industry was highly reliant on human resources, materials and
equipment being imported from all over the world. Therefore, strict lockdowns, travel bans
and other stringent measures to curtail the disasters resulting from the pandemic adversely
impacted resource availability and the management aspect of almost all construction
projects across the country. Various relaxation measures from the authorities, the positive
attitude of all stakeholders, different design modifications and the acceptance of using
available resources helped relatively reduce the overall impact and absorbed the delays.

Q7. How did COVID-19 affect resource availability and management?

This question garnered various responses that can be grouped into three major categories: a)
availability of labor (human resource), b) availability of materials and c) availability of
equipment. Most staff in the UAE is hired primarily from Asian countries. Some of these
employees were out of the country on vacation and for other official purposes when the
pandemic struck. Given the suspension of visa issuances and international travel bans to
contain the COVID-19 spread, people could not return to the UAE and continue their jobs.
Many labor camps in the country were also severely affected, and most workers were in
quarantine. Similarly, most of the materials and equipment were being imported from the
Far East, Europe and the USA, where production facilities and international flights were
affected, as stated by Baldwin and Mauro (2020). Many subcontractors, vendors and
suppliers were unable to continue offering their services because of the identified issues and,
as a result, execution of most projects across the country was delayed.

Q8. How were projects managed with low labor, material and equipment availability?
All participants identified that the UAE authorities had modified regulations and allowed
contractors to set up on-site labor accommodation facilities instead of a designated labor
camp. This measure reduced the need for special care to practice social distancing measures
and arrange for special transportation, also suggested by Ahani and Nilashi (2020). As a
result, labor and staff were less prone to the risk of contracting the virus. Additionally,
relaxations announced by the authorities for inter-emirate travel eased the pressure, as
many workers traveled from Abu Dhabi to Dubai in response to the market demand.
Participant P1 stated that their organization had modified its policy of hiring sub-
contractors. They had defined the “availability of labor” as high risk and prepared their
mitigation plan accordingly. While hiring, they specifically searched for readily available
labor and made deals with those who did not require new hiring. Long lists of terminations
from human resource departments across the country also absorbed the disruption in the
supply and demand to some extent. Moreover, various design modifications were made to
accommodate the supply chain disruptions and reduce delays. Participant P2 stated that
their organization previously required all electrical fixtures to be imported from various
European countries. To reduce delays in projects, they relaxed this requirement and allowed
the use of locally made or locally available fixtures after receiving the end-users mutual Impact of
consent. All the participants noted similar solutions to equipment unavailability. COVID-19 on
project
Contracts
Summary of results. All participants indicated that current contracts did not have clauses
performance
that effectively addressed the pandemic situation, and the impacts of COVID-19 made
project execution “burdensome.” Force majeure clauses were introduced by most execution
parties, and special amendments were suggested and implemented to address the situation.
Local authorities also introduced a series of amendments to the law, relaxations and
subsidies to support stakeholders. Participants suggested that all stakeholders should
conduct detailed studies on the current situation and consider such pandemics and other
COVID-19-related events in their future scope of work and contracts.

Q9. How did prevailing contract clauses handle this pandemic situation, and what were
the suggested amendments to address the situation?
To analyze the utility of contract clauses, a participant indicated that in the UAE, under
normal circumstances, the construction industry is generally driven by FIDIC contracts. In
these contracts, some clauses outline methods and guidelines to deal with the situation, such
as Clause 8 Sub-clauses 8.4 and 8.7 and Clause 19 Sub-clauses 19.1 and 19.4. However, these
clauses failed to efficiently address the pandemic situation because such impacts had not
previously occurred and were unanticipated. Participant P1 indicated that the force majeure
clause was most relevant, and many parties added this clause to early notices to clients and
consultants, as identified by Casady and Baxter (2020). However, this pandemic caused
operational disruptions all across the globe and not merely for one project or locality; thus,
prevailing contract clauses failed to address the impacts.
All participants indicated the positive attitude of all stakeholders. Participant P6 stated,
“We have incorporated the COVID-19 pandemic into the existing force majeure clause so
that these situations won’t affect our projects in the future.” Many amendments were made
to existing contracts to accommodate the agreed-on revised completion dates, payment
methods, project delivery methods, requirements for a specific number of skilled people,
liquidated damages, material and equipment specifications, authority approvals and
inspection methods. For example, participant P1 pointed out that they previously had a
requirement of six quality assurance and quality control engineers in the contract.
Subsequently, this number was reduced to three because of social distancing measures and
the non-availability of skilled workers. Similarly, some organizations modified their contract
type from lump-sum to cost plus a fixed fee. Some organizations also announced incentives
related to liquidated damages and reductions in fines if contracting firms finished projects
within the stipulated timeframe. The positive attitude and friendly amendments to the
prevailing contracts proved fruitful in steering the construction industry out of the dire
situation caused by the pandemic.

Q10. Were any guidelines issued by international contract institutes and local
authorities to curtail contractual issues specific to COVID-19?
In response to inquiries about the guidelines issued by international contract institutes and
local authorities, all the participants agreed that both the international and local authorities
took prompt actions to address the situation and channelized the construction industry in a
better direction. One of the participants, who was an expert in contracts, mentioned that the
FIDIC released a memorandum that discussed various scenarios and suggested possible
JEDT solutions to address the pandemic (FIDIC Guidance Memorandum, 2020). Even though the
contracts were driven by FIDIC guidelines, the local laws of the land prevailed in dealing
with the COVID-19 pandemic, and all participants identified the importance of the civil law
of the UAE. Local authorities introduced many guidelines to protect and safeguard this vital
industry and the people associated with it. Even during the lockdown, the construction
industry was exempted from the restrictions issued by local authorities. The Dubai
Development Authority introduced various measures to support construction activities in
the emirate, including the creation of digital platforms for a variety of permits, processes,
approvals, licensing and attestations. They also introduced various relaxations in the
payment of dues and fees to government authorities and extended building permits, fit-out
permits, temporary construction permits and other related permissions for the three months.
To observe social distancing measures and continue construction activities, virtual
inspections of construction sites were introduced that allowed inspectors to inspect work
sites at the various stages of construction using Microsoft Teams and Zoom. The Ministry
of Human Resource and Emiratisation (MoHRE) permitted on-site construction labor
accommodations and facilities to keep workers safe. The Government of Abu Dhabi also
introduced 16 dynamic initiatives under the country’s economic stimulus package that
waived off the requirement to submit bid bonds and performance guarantees for start-ups.
Various subsidies were also given, and penalties were waived. The participants stated that
all these changes in local laws, whether at the federal or individual emirate level, prompted
stakeholders to issue change-of-law notices to each other and ask for relevant concessions
and amendments in prevailing contracts.

Working with standard operating procedures

Summary of results. The COVID-19 pandemic disrupted normal operations across all
industries, and people feared contracting the virus. All international and local authorities
announced various SOPs to contain the virus. The MoHRE issued a ministerial decision on
precautionary measures, which described key SOPs to be followed in different work
environments. The construction industry quickly followed the instructions by investing in
the required personal protective equipment and other necessary items to measure, monitor
and control the spread of the virus. All the participants reported that all the measures were
implemented at all worksites and offices, as per local authorities’ directions. Initially,
these measures affected overall work performance, and other delays occurred, because
the management and workers were still getting used to the changes. Subsequently, everyone
adjusted to these SOPs, and progress became normal. Enforcement of the new SOPs to
curtail the spread of COVID-19 proved effective and allowed the construction industry to
continue operating during the pandemic.

Q11. What were the key SOPs issued by the authorities for the construction industry,
and how did they affect overall performance?
In response to the identification of the key SOPs issued by the authorities for the UAE
construction industry, all the participants grouped their responses into the following two
categories:
(1) employer’s obligations; and
(2) employee’s obligations.

The authorities instructed immediate reduction in the number of employees to 30% in a

workspace to ensure the required social distancing. All employers were asked to modify
their labor accommodations to ensure safe living conditions by providing various Impact of
checkpoints at all entrances and exits, avoiding all gatherings and social events, COVID-19 on
maintaining only 25% occupancy on all worker transports, and reporting all cases of
potential symptoms to the concerned authorities. All employers were asked to implement a
project
remote working system and provide necessary electronic support to enable all workers to performance
efficiently conduct their duties. Participant P4 stated that the authorities also instructed
employers to approve the remote working systems for workers over 50 years of age, people
of determination, workers suffering from respiratory or chronic diseases and women with
children. Similarly, these guidelines instructed employees to obtain approval for a remote
working system, visit their workplaces when required, perform all assigned duties within
the stipulated timeframe, answer all calls and emails to ensure smooth execution and
observe the productivity and confidentiality guidelines set by their employer. All
participants mentioned that these SOPs initially slowed down workers’ overall performance
and, as a result, construction project performance (Stiles et al., 2021). Once organizations
implemented the required systems and workers became accustomed to the new normal,
project performance improved and overall positive feedback was received.

Q12. How did the industry ensure the measures announced by the authorities?
When focusing on investigating how the construction industry ensured the successful
implementation of the precautionary measures announced by the local authorities, the respondents
identified several organizational measures to achieve the stated target. Participant P6 stated that
their organization announced a separate budget to purchase masks, gloves, sanitizers,
thermometers, thermal scanning equipment, walkthrough sanitization gates and handheld
spraying equipment, also identified by Amoah and Simpeh (2020). Participant P3 identified that
their organization made special transportation arrangements and built special on-site worker
accommodations following the introduced social distancing measures. Also identified was that
strategies were implemented to ensure on-site social distancing, such as dividing workers into
smaller groups and tasking them to work at various distanced places where possible, rather than
deploying a large number of workers to one place. Different timings for breaks were announced to
prevent large gatherings at lifts, entrances and exits, dining halls and other facilities. Emails,
awareness banners, circulars and instructions were continuously shared among the management
and workers. Training on safety measures was conducted. Furthermore, various monitoring teams
were assigned the task of monitoring offices and worksites to ensure that precautionary measures
were being followed. Participant P1 explained the budgetary requirements to arrange all necessary
items, tools and equipment to ensure a safe working environment. This respondent said,
Earlier, everybody was working with full capacity, and contracts required a certain number of
staff members and workers on-site as well. Now, contracting firms are working with reduced staff,
and they are diverting their surplus operational budget to purchase the required items.
The participant also indicated that organizations arranged special quarantine facilities to
keep workers for a certain period before allowing them to go back to work. The company
immediately referred their suspected cases to the designated government COVID-19 health
centers. All identified measures taken by the construction industry to ensure a safe working
environment for workers and staff proved effective and helped the industry thrive in these
difficult times.

Normalization, pandemic-proof policies and future directions

Summary of results. The exemptions and relaxations specifically for the construction
industry, economic support programs and precautionary measures introduced by local
JEDT authorities enabled the construction industry to recover from the disruptions caused by the
COVID-19 pandemic. Everyone quickly accepted the situation and adapted their behavior
accordingly. Most participants stated that the construction industry has almost recovered
and is expected to re-achieve its full potential within the next three-six months. The
participants suggested that the lessons learned should be carefully recorded and considered
when preparing risk assessment and mitigation plans, contingency plans, formal
agreements, supply orders and contracts for future projects.

Q13. By when do you expect normalization, and what will be the new normal for the
industry?
All participants responded optimistically to the inquiry about the normalization of the
current situation. Participant P4 stated that, although there were struggles, some
organizations were halfway to normalization. Furthermore, participants P1 and P2
mentioned that many contracting companies had achieved a new normal and were working
at their full potential. Participant P2 even stated that their excellent planning and
integration of technology-enabled their organization to complete one iconic project ahead of
schedule during the pandemic. Therefore, the UAE construction industry expected
normalization soon, and their optimism pointed toward the fact that normalization was near.
The participants also mentioned that accepting the pandemic situation was vital.
Organizations that realized this fact early on were among those that handled the pandemic
situation most efficiently and hence survived. Participant P1 stated,
The best move to tackle the situation is to accept the reality and form a normal relationship with
this pandemic, because sooner or later, people will have to adjust their lives according to the
situation at hand.
The participants pointed out that many organizations modified their operating procedures
according to the requirements and regulations imposed by the authorities to survive the
pandemic situation, such as a sudden digital transformation. In a nutshell, the respondents
emphasized that flexibility in accepting the current situation and molding their behavior as
per the needs of the situation are expected to be the key success factors for the construction
industry in the foreseeable future.

Q14. How do you view the future of construction projects, and what policies can we
adopt to minimize the impact of such events?
Economies worldwide took a hard hit because of the disruptions caused by the COVID-19
pandemic. The construction industry depends heavily on government agency expenditures
on different infrastructure projects. The disruptions caused by the pandemic forced
governments worldwide to spend heavily on containing it and support their economies
through a variety of economic stimulus packages. As a result, the construction industry
slowed down, as did other industries. The participants indicated a significant decline in the
number of tenders being floated by agencies. Participant P1 stated that because
opportunities are scarce, contracting organizations should remain focused and rearrange
their resources. However, all participants were optimistic and indicated that the government
had announced various infrastructure packages that would be directed to local businesses.
While recommending policies that could be adopted to minimize the impacts of such future
pandemics, participant P10 identified that their organization prepared in advance its
resources for the next six-eight months. Participant P6 indicated that this pandemic
situation should be included as an employer risk in all future contracts, and special cost
contingencies must be assigned for similar situations. All the participants agreed that Impact of
lessons learned should be properly examined and considered when planning and COVID-19 on
formulating future contracts.
As per the input provided by the participants, Figure 2 displays the timeline that
project
represents the stages of COVID-19 in the UAE and the occurrence of the events scheduled performance
from January 1, 2020, to December 31, 2020. The timeline is divided into three significant
periods: a) pre-COVID-19, b) peak COVID-19 and c) recovery. In the pre-COVID-19 period,
the construction industry performed normally and targets were being met as per
expectations. The peak-COVID-19 period started with the WHO declaring COVID-19 a
pandemic. Local authorities promptly responded to the situation at hand and announced
various economic stimulus packages to support the industry during these difficult times
(Ghandour, 2020). After the completion of the national sanitization drive and partial
resumption of international flights, the UAE construction industry entered a recovery
period, as shown in the timeline.

Pandemic and digital transformation

The construction industry is slow to adopt innovative technologies and engage in digital
transformation and is perceived as being stuck with old business models and practices
(Takim et al., 2013). Many IT-enabled tools are available that have proven their effectiveness
and reliability in achieving the successful execution of construction projects; examples
include BIM (Sami Ur Rehman et al., 2020), virtual design and construction (Shafiq and
Afzal, 2020), radio frequency identification (RFID) (Chen et al., 2020), 3D printing
(Arunothayan et al., 2020) and Internet of Things (IoT) (Panteli et al., 2020). The COVID-19

Figure 2
Timeline of major
events related to
COVID-19 for the
UAE
JEDT pandemic forced the construction industry to quickly adapt available technologies and
encouraged it to embrace the required digital transformation.
The participants identified that the UAE construction industry successfully
implemented different IT-based tools and techniques to reduce the number of workers at
sites and allowed their teams to work remotely. One participant mentioned that their
organization introduced various artificial intelligence-enabled tools and stated,
AI is playing a positive role in reducing the number of construction personnel, and COVID-19
accelerated the implementation of some practices which were previously under evaluation. For
example, BIM (Level 1 and Level 2), 360 videos, drone surveillance, RFID, Bluetooth Low Energy,
and cloud-based coordination, in addition to design and build and off-site fabrication for
Mechanical, Electrical, and Plumbing (MEP) are tools that are now readily being accepted as part
of construction workflows.
This pandemic has already changed the norms of the construction industry and has
encouraged all stakeholders to take big steps, adopt digital tools and undergo digital
transformation. Another participant indicated that their organization successfully
implemented and benefited from augmented reality, Building Information Modeling, IoT
and various cloud-based monitoring and management solutions. All participants agreed
that this pandemic was a blessing in disguise for the construction industry’s indispensable
shift to digital transformation.

Conclusion
The COVID-19 pandemic caused disruptions in usual functioning patterns around the
world. The rapid spread of the virus significantly affected the normal operations of the
construction industry.
The spread of the pandemic interrupted international travel, forced stringent lockdowns,
initiated sanitization drives and fueled the announcement of all other precautionary and
preventive measures and restrictions by authorities, delaying construction projects across
the country, which further resulted in financial losses; restricted the availability of human
resources, materials and equipment; invalidated current contracts and agreements; forced
the industry to follow novel SOPs; and dimmed the future of the billion-dollar construction
industry.
However, the positive attitude of all stakeholders in accepting the prevailing situation,
the announcement of contingency budgets, modification of specifications for available
resources, mutual agreements to various contractual changes to positively address the
situation, compliance with and adjustment to precautionary and preventive measures
announced by authorities to curtail the spread of the virus and rapid transformation of the
industry to a digital workplace brought hope and steered the construction industry on the
right path to recover from the disruptions caused by the COVID-19 pandemic.
Moreover, the authorities’ relaxations and exemptions announced for the construction
industry and the efficient economic support schemes also proved effective and supported the
industry during this difficult period.
This study concludes that the COVID 19 pandemic has changed the working practices of
the construction industry in the UAE in many ways. The construction projects in the UAE
quickly adopted the new working norms and showed flexibility in absorbing the impact of
delays and cost overruns through effective contractual changes and support from financial
institutes in the country. The UAE government’s economic support programs precautionary
measures and health-care system have played a major role in the return of the construction
workforce, helping the construction projects performance to recover from the impact of
pandemic imposed delays and disruptions. The construction industry in the UAE has Impact of
shown a strong drive during the pandemic to adopt digital tools and methods (i.e. BIM, COVID-19 on
remote project monitoring and management, cloud-based collaboration) to manage
construction projects.
project
The findings of this study document the impact of COVID-19 on various aspects of performance
construction projects along with the industry response to manage and mitigate the impact
on project performance metrics. This provides valuable insight for the AEC industry
professionals to adopt proactive measures to manage new, and existing, projects in the light
of a continued pandemic.

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Fullana-I-Palmer, P. (2020), “Environmental and nutritional impacts of dietary changes in Spain
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Glover, R.E., van Schalkwyk, M.C.I., Akl, E.A., Kristjannson, E., Lotfi, T., Petkovic, J., Petticrew, M.P.,
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Corresponding author
Muhammad Tariq Shafiq can be contacted at: muhammad.tariq@uaeu.ac.ae

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